Bank of Japan

{{Short description|Monetary authority of Japan}} {{Use dmy dates|date=February 2021}} {{Infobox Central bank | bank_name_in_local = {{nobold|{{lang|ja|日本銀行}}}} | logo = 日本銀行ロゴ.svg | image = Bank of Japan 2010.jpg | caption = Headquarters in Chūō, Tokyo | headquarters = Chūō, Tokyo, Japan | coordinates = {{coord|35.6861|139.7715|region:JP}} | established = 27 June/10 October 1882 | president = Kazuo Ueda (9 April 2023 – present) | ownership = At least 55% of all capital must be owned by the Government of Japan{{efn|The rest are publicly traded over-the-counter in the Tokyo Stock Exchange ({{TYO|8301}}). Neither the Government nor the private investors have voting power over the Bank's operations<ref name="outline"/>}} | leader_title = Governor | bank_of = Japan | currency = Yen | currency_iso = JPY | reserves = {{US$|1.12|link=yes}} trillion (October 2023)<ref name="dnbinfo">{{cite web |last1=Weidner |first1=Jan |title=The Organisation and Structure of Central Banks |url=https://d-nb.info/1138787981/34 |website=Katalog der Deutschen Nationalbibliothek |year=2017 |format=PDF |access-date=14 May 2020 |archive-date=28 May 2020 |archive-url=https://web.archive.org/web/20200528003901/https://d-nb.info/1138787981/34 |url-status=live }}</ref> | borrowing_rate = 0.75%<ref>{{cite news |url=https://www.reuters.com/world/asia-pacific/bank-japan-set-raise-interest-rates-30-year-high-2025-12-18/ |title=Bank of Japan raises interest rates to 30-year high, signals more hikes |date=18 December 2025 |work=Reuters |last1=Kihara |first1=Leika |last2=Yamazaki |first2=Makiko}}</ref> | deposit_rate = | website = {{URL|https://www.boj.or.jp/en/|boj.or.jp}} | preceded = | succeeded = | footnotes = | governance = | embed = | IOER = }}

The {{Nihongo|'''Bank of Japan'''|日本銀行|Nippon Ginkō|extra='''BOJ'''}} is the central bank of Japan.<ref name="nussbaum708">Nussbaum, Louis Frédéric. (2005). "Nihon Ginkō" in {{Google books|p2QnPijAEmEC|''Japan encyclopedia'', p. 708.|page=708}}</ref> The bank is often called {{Nihongo|''Nichigin''|日銀}} for short. It is headquartered in Nihonbashi, Chūō, Tokyo.<ref>"[http://www.boj.or.jp/en/type/etc/tokyo.htm Guide Map to the Bank of Japan Tokyo Head Office]. {{webarchive|url=https://web.archive.org/web/20090604105315/http://www.boj.or.jp/en/type/etc/tokyo.htm |date=2009-06-04 }}". Bank of Japan. Retrieved 22 December 2009.</ref>

The said bank is a corporate entity independent of the Japanese government,<ref name="outline">{{Cite web |title=Outline of the Bank : 日本銀行 Bank of Japan |url=https://www.boj.or.jp/en/about/outline/index.htm |access-date=2024-02-18 |website=Bank of Japan |language=en}}</ref> and while it is not an administrative organisation of the state, its monetary policy falls within the scope of administration. From a macroeconomic perspective, long-term stability of prices is deemed crucial. However, the political sector tends to favour short-term measures. Thus, the bank's autonomy and independence are granted from the standpoint of ensuring long-term public welfare and political neutrality.<ref>{{Cite web |title=金融制度調査会 |url=https://www.fsa.go.jp/p_mof/singikai/kinyusei/top.htm |access-date=2024-02-18 |website=www.fsa.go.jp}}</ref>

==History==

===Background=== {{See also|National Banks in Meiji Japan}}

Like most modern Japanese institutions, the Bank of Japan was founded after the Meiji Restoration. Prior to the Restoration, Japan's feudal fiefs all issued their own money, ''hansatsu'', in an array of incompatible denominations, but the ''New Currency Act'' of Meiji 4 (1871) did away with these and established the yen as the new decimal currency, which had parity with the Mexican silver dollar.<ref>Nussbaum, "Banks", {{Google books|p2QnPijAEmEC|page=69}}.</ref> The former han (fiefs) became prefectures and their mints became private chartered banks which, however, initially retained the right to print money. For a time both the central government and these so-called national banks issued money.

===Foundation and early development===

Finance minister Matsukata Masayoshi initially proposed the creation of the bank of Japan sometime in March 1882, soon enacted in the Bank of Japan Act (Imperial Ordinance) of {{date|1882-6-27}} and formally founded on {{date|1882-10-10}}.{{R|Metzler|p=25}} The primary source of inspiration for the bank's design was the National Bank of Belgium (est. 1850) which was viewed as one of the best-designed European central banks of its era.<ref>{{citation |title=An 'ideal bank of issue': the Banque Nationale de Belgique as a model for the Bank of Japan |publisher=Cambridge University Press |journal=Financial History Review |issue=2 |date={{date|2006-10-23}} |author=Michael Schiltz|volume=13 }}</ref> Since then, the Bank of Japan has been partly privately owned. Its stock is traded over the counter, hence the stock number.<ref>Vande Walle, Willy ''et al.'' [http://www.kuleuven.be/research/researchdatabase/project/3H03/3H030060.htm "Institutions and ideologies: the modernization of monetary, legal and law enforcement 'regimes' in Japan in the early Meiji-period (1868-1889)"] {{Webarchive|url=https://web.archive.org/web/20130516205552/http://www.kuleuven.be/research/researchdatabase/project/3H03/3H030060.htm |date=16 May 2013 }} (abstract). FRIS/Katholieke Universiteit Leuven, 2007; retrieved 17 October 2012.</ref> A number of modifications based on other national banks were encompassed within the regulations under which the bank was founded.<ref>Longford, Joseph Henry. (1912). [https://books.google.com/books?id=rpRFAAAAIAAJ&dq=bank+of+Japan&pg=PA293 ''Japan of the Japanese''] {{Webarchive|url=https://web.archive.org/web/20150330135030/http://books.google.com/books?id=rpRFAAAAIAAJ&pg=PA293&dq=bank+of+Japan&client=firefox-a#PPA289,M1 |date=30 March 2015 }}, p. 289.</ref> In 1883, all national banks were stripped of their banknote issuance privilege,<ref name=Kahm>{{citation |publisher=University of California Los Angeles |title=Colonial Finance: Daiichi Bank and the Bank of Chosen in Late Nineteenth and Early Twentieth Century Korea, Japan, and Manchuria |url=https://escholarship.org/uc/item/20k4r6sc |author=Howard Kahm |date=2012}}</ref>{{rp|34}} and the Bank of Japan was given a monopoly on controlling the money supply in 1884. Still, it would be another 20 years before all previously issued notes were retired.<ref>Cargill, Thomas ''et al.'' (1997). [https://books.google.com/books?id=f3s47HWB8g8C&dq=bank+of+Japan&pg=PA197 ''The political economy of Japanese monetary policy''] {{Webarchive|url=https://web.archive.org/web/20160428043744/https://books.google.com/books?id=f3s47HWB8g8C&pg=PA197&dq=bank%20of%20Japan&client=firefox-a#PPA10,M1 |date=28 April 2016 }}, p. 10.</ref>

Following the passage of the Convertible Bank Note Regulations (May 1884), the Bank of Japan issued its first banknotes in 1885 (''Meiji 18''). Despite some small glitches—for example, it turned out that the konjac powder mixed in the paper to prevent counterfeiting made the bills a delicacy for rats—the run was largely successful. In 1897, Japan joined the gold standard,<ref>Nussbaum, "Banks", {{Google books|p2QnPijAEmEC|page=70}}</ref> and in 1899 the former "national" banknotes were formally phased out.

thumb|right|The Osaka branch of the Bank of Japan is seen in the top right of this 1930 aerial photograph. The wide street in front of the bank is part of the Mido-Suji.

In the early 20th century the Bank of Japan, while a private-sector institution, worked in close coordination with the Japanese government and took direction from the minister of Finance. Its governor, as Takahashi Korekiyo put it, was considered "the number-one representative of the business world" in Japan's institutional system.{{R|Metzler|p=84}}

===World War II and aftermath===

The Bank of Japan was reorganized in 1942<ref name="nussbaum708"/><ref>{{Cite journal |last=Langdon |first=Frank C. |date=1961 |title=Big Business Lobbying in Japan: The Case of Central Bank Reform |url=https://www.jstor.org/stable/1952681 |journal=The American Political Science Review |volume=55 |issue=3 |pages=527–538 |doi=10.2307/1952681 |jstor=1952681 |issn=0003-0554|url-access=subscription }}</ref> (fully only after 1 May 1942), under the {{nihongo|Bank of Japan Act of 1942|日本銀行法昭和17年法律第67号|}}, promulgated on 24 February 1942. There was a brief post-war period during the Occupation of Japan when the bank's functions were suspended, and military currency was issued. In 1949, the bank was again restructured.<ref name="nussbaum708"/>

In the 1970s, the bank's operating environment evolved along with the transition from a fixed foreign currency exchange rate and a rather closed economy to a large open economy with a variable exchange rate.<ref>Cargill, [https://books.google.com/books?id=f3s47HWB8g8C&dq=bank+of+Japan&pg=PA197 p. 197.] {{Webarchive|url=https://web.archive.org/web/20160428043744/https://books.google.com/books?id=f3s47HWB8g8C&pg=PA197&dq=bank+of+Japan&client=firefox-a |date=28 April 2016 }}</ref>

During the entire post-war era, until at least 1991, the Bank of Japan's monetary policy has primarily been conducted via its {{nihongo|'window guidance'|窓口指導|madoguchi shindō}} credit controls (which are the model for the Chinese central bank's primary tool of monetary policy implementation), whereby the central bank would impose bank credit growth quotas on the commercial banks. The tool was instrumental in the creation of the 'bubble economy' of the 1980s. It was implemented by the Bank of Japan's then {{nihongo|"Business Department"|営業局|Eigyō Kyoku}}, which was headed during the "bubble years" from 1986 to 1989 by Toshihiko Fukui (who became deputy governor in the 1990s and governor in 2003).

A major 1997 revision of the Bank of Japan Act was designed to give it greater independence;<ref>Cargill, [https://books.google.com/books?id=f3s47HWB8g8C&dq=bank+of+Japan&pg=PA197 p. 19.] {{Webarchive|url=https://web.archive.org/web/20160428043744/https://books.google.com/books?id=f3s47HWB8g8C&pg=PA197&dq=bank+of+Japan&client=firefox-a#PPA19,M1 |date=28 April 2016 }}</ref> however, the Bank of Japan has been criticized for already possessing excessive independence and lacking in accountability before this law was promulgated.<ref>Horiuchi, Akiyoshi (1993), "Japan" in Chapter 3, "Monetary policies" in Haruhiro Fukui, Peter H. Merkl, Hubrtus Mueller-Groeling and Akio Watanabe (eds), ''The Politics of Economic Change in Postwar Japan and West Germany, vol. 1, Macroeconomic Conditions and Policy Responses'', London: Macmillan.</ref> A certain degree of dependence might be said to be enshrined in the new Law, article 4 of which states: : ''In recognition of the fact that currency and monetary control is a component of overall economic policy, the Bank of Japan shall always maintain close contact with the government and exchange views sufficiently, so that its currency and monetary control and the basic stance of the government's economic policy shall be mutually harmonious.''

However, since the introduction of the new law, the Bank of Japan has rebuffed government requests to stimulate the economy.<ref>See rebuffed requests by the government representatives at BOJ policy board meetings: e.g. {{cite web |url=http://www.boj.or.jp/en/type/release/teiki/giji/g001130.htm |title=Minutes of the Monetary Policy Meeting on November 30, 2000 |access-date=9 September 2010 |url-status=dead |archive-url=https://web.archive.org/web/20071117225902/http://www.boj.or.jp/en/type/release/teiki/giji/g001130.htm |archive-date=17 November 2007 }} or refusals to increase bond purchases: [https://www.bloomberg.com/news/2010-09-09/governor-shirakawa-defends-boj-s-self-imposed-cap-on-government-bond-buys.html Bloomberg News.] {{Webarchive|url=https://web.archive.org/web/20141029022159/http://www.bloomberg.com/news/2010-09-09/governor-shirakawa-defends-boj-s-self-imposed-cap-on-government-bond-buys.html |date=29 October 2014 }}</ref>

===Boom and bust cycles=== thumb|300px|Japan money supply and inflation (year over year) {{legend-line|#BC002D solid 3px|M2 money supply}} {{legend-line|#FFD932 solid 3px|Inflation}} When the Nixon shock happened in August 1971, the Bank of Japan (BOJ) could have appreciated the currency in order to avoid inflation. However, they still kept the fixed exchange rate as 360Yen/$ for two weeks, so it caused excess liquidity. In addition, they persisted with the Smithsonian rate (308Yen/$), and continued monetary easing until 1973. This created a greater-than-10% inflation rate at that time. In order to control stagflation, they raised the official bank rate from 7% to 9% and skyrocketing prices gradually ended in 1978.

In 1979, when the energy crisis happened, the BOJ raised the official bank rate rapidly. The BOJ succeeded in a quick economic recovery. After overcoming the crisis, they reduced the official bank rate. In 1980, the BOJ reduced the official bank rate from 9.0% to 8.25% in August, to 7.25% in November, and to 5.5% in December in 1981. "Reaganomics" was in vogue in America and USD became strong. However, Japan tried to implement fiscal reconstruction at that time, so they did not stop their financial regulation.

In 1985, the agreement of G5 nations, known as the Plaza Accord, USD slipped down and Yen/USD changed from 240yen/$ to 200yen/$ at the end of 1985. Even in 1986, USD continued to fall and reached 160yen/$. In order to escape deflation, the BOJ cut the official bank rate from 5% to 4.5% in January, to 4.0% in March, to 3.5% in April, 3.0% in November. At the same time, the government tried to raise demand in Japan in 1985, and did economy policy in 1986. However, the market was confused about the rapid fall of USD. After the Louvre Accord in February 1987, the BOJ decreased the official bank rate from 3% to 2.5%, but JPY/USD was 140yen/$ at that time and reached 125yen/$ in the end of 1987. The BOJ kept the official bank rate at 2.5% until May in 1989. Financial and fiscal regulation led to a widespread over-valuing of real estate and investments and Japan faced a bubble at that time.

[[File:Japan bonds.webp|thumb|310px|{{center|Japan bonds}} Inverted yield curve in 1990 Zero interest-rate policy started in 1999<ref>{{cite web |url=https://www.weforum.org/stories/2024/03/japan-ends-negative-interest-rates-economy-monetary-policy/#:~:text=%E2%80%9CBOJ%2520decided%2520to%2520implement%2520a,%252C%2520namely%25200.25%2520to%25200.5%2525. |title=Japan ends era of negative interest rates. A chief economist explains |date=2024-03-26 |accessdate=2025-01-16 |first1=Spencer |last1=Feingold |publisher=World Economic Forum}}</ref> Negative interest policy started in 2016<ref>https://www.adb.org/publications/effectiveness-japan-negative-interest-rate-policy</ref> {{legend-line|#00A2FF solid 3px|30 year}} {{legend-line|#61D836 solid 3px|20 year}} {{legend-line|#929292 solid 3px|10 year}} {{legend-line|#F8BA00 solid 3px|5 year}} {{legend-line|#FF2600 solid 3px|2 year}} {{legend-line|#73FDEA solid 3px|1 year}} ]]

After 1990, the stock market and real asset market fell. At that time BOJ regulated markets until 1991 in order to end the bubble.

In January 1995, the Great Hanshin earthquake occurred and the Japanese yen became stronger. JPY/USD reached 80yen/$, so the BOJ reduced the office bank rate to 0.5% and the yen recovered. The period of deflation started at that time.

In 1999, the BOJ started zero-interest-rate policy (ZIRP), but they ended it despite government opposition when the IT bubble happened in 2000. However, Japan's economic bubble burst in 2001 and the BOJ adopted the balance of current account as the main operating target for the adjustment of the financial market in March 2001 (quantitative relaxation policy), shifting from the zero-interest-rate policy. From 2003 to 2004, Japanese government did exchange intervention operation in huge amount, and the economy recovered a lot. In March 2006, BOJ finished quantitative easing, and finished the zero-interest-rate policy in June and raised to 0.25%.

During the 2008 financial crisis, BOJ reduced the uncollateralized call rate to 0.3% and adopted the supplemental balance of current account policy. In December 2008, BOJ reduced uncollateralized call rate again to 0.1% and they started to buy Japanese Government Bond (JGB) along with commercial paper (CP) and corporate bonds. <ref>Kuroda Haruhiko(2013)財政金融政策の成功と失敗</ref>

[[File:Japanese Bond Market.webp|thumb|300px|Japanese bond market Negative interest rates started in 2014. {{legend-line|#FF42A1 solid 3px|40 year bond}} {{legend-line|#BC002D solid 3px|10 year bond}} {{legend-line|#61D836 solid 3px|5 year bond}} {{legend-line|#00A2FF solid 3px|1 year bond}} {{legend-line|#F27200 solid 3px|1 month bond}} ]]

In 2013, the head of the BOJ (Kuroda) announced a new quantitative easing program (QE). This program would be very large in terms of quantity, but it would also be different in terms of quality—qualitative easing (QQE). In other words, the BOJ would (and did) also purchase riskier assets like stocks and REITs.<ref>{{cite web |title=Quantitative and Qualitative Monetary Easing |url=https://www.boj.or.jp/en/announcements/press/koen_2013/data/ko130412a1.pdf |url-status=live |archive-url=https://web.archive.org/web/20130417185429/https://www.boj.or.jp/en/announcements/press/koen_2013/data/ko130412a1.pdf |archive-date=2013-04-17}}</ref> In 2016, the BOJ initiated yield curve control (YCC),<ref name="sipa.columbia.edu">{{Cite web |title=Bank of Japan: Japan Yield Curve Control Regime | Columbia SIPA |url=https://www.sipa.columbia.edu/academics/capstone-projects/bank-japan-japan-yield-curve-control-regime |url-status=dead |archive-url=https://web.archive.org/web/20221022063454/https://www.sipa.columbia.edu/academics/capstone-projects/bank-japan-japan-yield-curve-control-regime |archive-date=22 October 2022 |access-date=11 February 2022 |website=www.sipa.columbia.edu}}</ref> and started its negative interest rates policy (NIRP).<ref>{{cite web |url=https://www.investopedia.com/articles/markets/080716/why-negative-interest-rates-are-still-not-working-japan.asp |website=investopedia |first=Sean |last=Ross |title=Why Negative Interest Rates Are Still Not Working in Japan |date=15 October 2023}}</ref> The BOJ is also the largest owner of Japanese stocks.<ref>{{cite web |author1=Andrew Whiffin |date=1 April 2019 |title=BoJ's dominance over ETFs raises concern on distorting influence |url=https://www.ft.com/content/aba02f8c-3eab-11e9-9499-290979c9807a |url-status=live |archive-url=https://web.archive.org/web/20201130103616/https://www.ft.com/content/aba02f8c-3eab-11e9-9499-290979c9807a |archive-date=30 November 2020 |access-date=25 February 2021 |website=Financial Times |quote=the BoJ was ranked as a top ten shareholder in some 40 per cent of all Japan’s listed companies last year, according to Nikkei.}}</ref><ref>{{cite web |date=6 December 2020 |title=BOJ Becomes Biggest Japan Stock Owner With $434 Billion Hoard |url=https://www.bloomberg.com/news/articles/2020-12-06/boj-becomes-biggest-japan-stock-owner-with-434-billion-hoard |url-status=live |archive-url=https://web.archive.org/web/20210217034732/https://www.bloomberg.com/news/articles/2020-12-06/boj-becomes-biggest-japan-stock-owner-with-434-billion-hoard |archive-date=17 February 2021 |access-date=25 February 2021 |website=Bloomberg.com |language=en}}</ref><ref>{{cite web |date=28 January 2021 |title=BOJ's ETF buying not distorting markets: Kuroda |url=https://www.businesstimes.com.sg/government-economy/bojs-etf-buying-not-distorting-markets-kuroda |url-status=live |archive-url=https://web.archive.org/web/20210204224745/https://www.businesstimes.com.sg/government-economy/bojs-etf-buying-not-distorting-markets-kuroda |archive-date=4 February 2021 |access-date=25 February 2021 |website=Business Times |agency=Reuters}}</ref> In 2024, following announcements of about 5% wage growth by Japan's largest companies,<ref>{{cite news |url=https://www.reuters.com/markets/asia/japan-unions-will-unveil-results-wage-talks-presaging-shift-central-bank-2024-03-15 |work=Reuters|title=Bank of Japan scraps radical policy, makes first rate hike in 17 years |first=Leika |last=Kihara |date=March 19, 2024}}</ref> the BOJ ended eight year of negative interest rates by setting new short term targets of 0 to 0.1%.<ref>{{cite news |url=https://www.japantimes.co.jp/business/2024/03/19/boj-ends-negative-rates |work=The Japan Times |last=Nagata |first=Kazuaki |date=19 March 2024 |title=BOJ introduces first rate hike in 17 years following pay gains}}</ref>

In December 2025, the BOJ raised its short-term policy target to a 30-year high of 0.75 per cent as it believed that Japan was on the cusp of durably achieving its 2 per cent inflation target. However, escalating conflicts in the Middle East resulted in pressure for the BOJ holding off on raising rates further in light of surging oil prices.<ref>{{Cite web |title=Japan's Takaichi faces fresh scrutiny over BOJ policy stance |url=https://www.channelnewsasia.com/business/japans-takaichi-faces-fresh-scrutiny-over-boj-policy-stance-5983231 |access-date=2026-03-12 |website=CNA |language=en}}</ref>

===Curbing deflation===

Following the election of Prime Minister Shinzō Abe in December 2012, the Bank of Japan, with Abe's urging, took proactive steps to curb deflation in Japan. On 30 October 2012, the Bank of Japan announced that it would undertake further monetary-easing action for the second time in a month.<ref>{{cite news |title=Bank of Japan Expands Asset-Purchase Program. |url=https://www.wsj.com/articles/SB10001424052970204840504578087982777199470 |url-status=live |archive-url=https://web.archive.org/web/20171116131717/https://www.wsj.com/articles/SB10001424052970204840504578087982777199470 |archive-date=16 November 2017 |access-date=3 August 2017 |work=The Wall Street Journal}}</ref> Under the leadership of new Governor Haruhiko Kuroda, the Bank of Japan released a statement on 5 April 2013 announcing that it would be purchasing securities and bonds at a rate of 60-70 trillion yen a year in an attempt to double Japan's money base in two years.<ref>{{cite news |last=Riley |first=Charles |date=4 April 2013 |title=Bank of Japan takes fight to deflation |url=https://money.cnn.com/2013/04/04/news/economy/bank-of-japan-decision/index.html |url-status=dead |archive-url=https://web.archive.org/web/20201029175923/https://money.cnn.com/2013/04/04/news/economy/bank-of-japan-decision/index.html |archive-date=29 October 2020 |access-date=2 August 2020 |work=CNN}}</ref> But by 2016, it was apparent that three years of monetary easing had little effect on deflation so the Bank of Japan instigated a review of its monetary stimulus program.<ref name="jt-20160731">{{cite news |author=Stanley White |date=31 July 2016 |title='Helicopter monet' talk takes flight as Bank of Japan runs out of runway |url=http://www.japantimes.co.jp/news/2016/07/31/business/economy-business/helicopter-money-talk-takes-flight-bank-japan-runs-runway/#.V55ptaIbiUk |url-status=live |archive-url=https://web.archive.org/web/20160804152345/http://www.japantimes.co.jp/news/2016/07/31/business/economy-business/helicopter-money-talk-takes-flight-bank-japan-runs-runway/#.V55ptaIbiUk |archive-date=4 August 2016 |access-date=1 August 2016 |newspaper=The Japan Times |agency=Reuters}}</ref>

==Operations==

=== Objectives === The comprehensive revision of the Bank of Japan Act in 1998 clearly defined the objectives of the Bank of Japan as 'price stability' and 'financial system stability'. This revision affirmed the Bank's operation independent from the government (primarily the Ministry of Finance), and removed the provisions established in 1942, which had been problematic. The 1942 provision, enacted during the Second World War, stated the objective of the bank was to '{{nihongo|Ensure the Appropriate Exertion of the Nation's Total Economic Power, by Regulating Currency, Adjusting Finance, and Maintaining and Fostering the Credit System in Accordance with the Policies of the State|国家経済総力ノ適切ナル発揮ヲ図ル為国家ノ政策ニ即シ通貨ノ調節、金融ノ調整及信用制度ノ保持育成ニ任ズル。}}'.<ref>{{Cite web |script-title=ja:安倍元首相「日銀子会社」論の背景にある狙いとは【解説委員室から】：時事ドットコム |url=https://www.jiji.com/jc/v8?id=202205kaisetsuiin026 |access-date=2024-02-18 |script-website=ja:時事ドットコム |language=ja}}</ref>

BoJ's policies are decided at '''Monetary Policy Meetings''' ('''MPM''', {{tlit|ja|Kinyu Seisaku Kettei Kaigo}}, {{lang|ja|金融政策決定会合}}), which are attended by the Policy Board and held every other month.<ref>{{Cite web |title=Monetary Policy Meetings : 日本銀行 Bank of Japan |url=https://www.boj.or.jp/en/mopo/mpmsche_minu/index.htm |access-date=2024-02-18 |website=Bank of Japan |language=en}}</ref>

==== Price stability ==== Stable prices are maintained by seeking to ensure that price increases meet the inflation target. The bank aims to meet this target primarily by adjusting the base interest rate (known as the bank rate), which is decided by the Policy Board.

As of 2024 the inflation target is 2%. Japan has long suffered deflation and disinflation since the 1990s, which has been blamed as one of the main causes of the long-term economic downturn of the once world's second largest economy. For the past two decades, the primary focus of BOJ policies has been to achieve a stable inflation.<ref>{{Cite web |date=2013-03-05 |title=無期限緩和、前倒し脱デフレ「何でもやる」 |url=https://www.nikkei.com/article/DGXDASGC04012_U3A300C1EA2000/ |access-date=2024-02-18 |website=日本経済新聞 |language=ja}}</ref>

==== Financial system stability ==== Financial system is defined as the overall structure of receipt and payment as well as lending and borrowing of money, and its stability refers to 'a state in which the financial system functions properly, and participants, such as firms and individuals, have confidence in the system'.<ref>{{Cite web |title=Outline of Financial System Stability : 日本銀行 Bank of Japan |url=https://www.boj.or.jp/en/finsys/outline/index.htm |access-date=2024-02-18 |website=Bank of Japan |language=en}}</ref>

=== Functions === The aforementioned objectives are realised through the exertion of the functions mentioned below.<ref>{{Cite web |title=Functions and Operations of the Bank of Japan : 日本銀行 Bank of Japan |url=https://www.boj.or.jp/en/about/outline/foboj.htm |access-date=2024-02-18 |website=Bank of Japan |language=en}}</ref>

* As the sole issuer of banknotes of Japan, BoJ carries out the issuance and management of Bank of Japan notes. * BoJ implements monetary policy through methods such as policy interest rate (formerly known as the official discount rate) operations, open market operations, and reserve requirement ratio operations, thereby adjusting the volume of money in circulation to stabilise prices and the national economy. * BoJ facilitates transactions among financial institutions using its current accounts, effectively acting as a 'bank for banks'. (Individuals and corporations (such as general businesses) are not allowed to open accounts with BoJ.) * BoJ serves as the government's bank for the disbursement and receipt of public funds. * As a 'bank of banks', BoJ ensures the stability of the financial order through smooth fund settlements via domestic exchange transactions and providing system collateral (acting as the "lender of last resort") through facilities such as {{nihongo|BoJ's special lending programme|日銀特融|Nichigin Tokuyu}}. Transactions in deposits and loans are restricted to financial institutions designated in accordance with the Bank of Japan Act. * BoJ conducts international relations activities, including interventions in the foreign exchange market, with other central banks and public institutions worldwide. * BoJ collects and researches financial and economic information, and compiles and publishes economic statistics.

===Financial holdings===

Bank of Japan owns 4.7% of Japanese public stocks.<ref>{{cite web |title=Bank of Japan to be top shareholder of Japan stocks |url=https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be-top-shareholder-of-Japan-stocks |access-date=20 April 2020 |archive-date=24 April 2020 |archive-url=https://web.archive.org/web/20200424183637/https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be-top-shareholder-of-Japan-stocks |url-status=live }}</ref> Since 2020 it has owned more domestic stock than any other body.<ref>{{Cite news|date=2020-12-06|title=BOJ Becomes Biggest Japan Stock Owner With $434 Billion Hoard|language=en|work=Bloomberg.com|url=https://www.bloomberg.com/news/articles/2020-12-06/boj-becomes-biggest-japan-stock-owner-with-434-billion-hoard|access-date=2021-10-12|archive-date=17 February 2021|archive-url=https://web.archive.org/web/20210217034732/https://www.bloomberg.com/news/articles/2020-12-06/boj-becomes-biggest-japan-stock-owner-with-434-billion-hoard|url-status=live}}</ref>

==Buildings== ===Headquarters=== {{Main|Bank of Japan Headquarters}}

The Tokyo head office building of the BOJ is located in Nihonbashi, Chuo. It is on the site of a former gold mint (''Kinza'') and, not coincidentally, near the famous Ginza district, whose name means "silver mint". The building was designed by architect Tatsuno Kingo in eclectic style in 1890, and completed in 1896 under the direction of entrepreneur Shibusawa Eiichi.<ref name=Metzler>{{cite book |title=Lever of Empire: The International Gold Standard and the Crisis of Liberalism in Prewar Japan |author=Mark Metzler |publisher=University of California Press |year=2006}}</ref>{{rp|8}} Tatsuno had been influenced by the architecture of the Bank of England and especially of the National Bank of Belgium (NBB)'s buildings in Brussels and Antwerp, paralleling the NBB's influence on the institutional design of the Bank of Japan.<ref>{{cite conference |url=https://www.academia.edu/107448529 |book-title=Britain & Japan: Biographical Portraits - Volume VII |title=Tatsuno Kingo (1854–1919): 'A Leading Architect' Of The Meiji Era |author=Ian Ruxton |editor=Hugh Cortazzi |date=September 2010}}</ref>

Tatsuno's former engineer and successor as the bank's architect, {{ill|Nagano Uheiji|ja|長野宇平治}}, directed repairs of the bank's building following the 1923 Great Kantō earthquake. In the 1930s, he designed extensions of the building on its northern and eastern sides, in the same eclectic style but using reinforced concrete. The eastern extension is still extant,<ref name=BOJvideo>{{cite web |website=Bank of Japan |url=https://www.boj.or.jp/en/about/education/kenchiku.htm |accessdate={{date|2025-8-10}} |title=Video: The Bank's Branches Designed by TATSUNO Kingo and NAGANO Uheiji}}</ref> whereas the northern extension was replaced after 30 years by a larger building designed in 1966 by Matsuda Hirata Architects. Completed in 1973 and the largest building in the complex, it has 10 floors overground and 5 floors underground. Finally, the south annex building, erected 1982–1984, is the home of Currency Museum of the Bank of Japan and of the bank’s Institute for Monetary and Economic Studies (IMES).<ref>{{cite web |website=Bank of Japan |url=https://www.boj.or.jp/en/about/education/oshiete/history/j04.htm |accessdate={{date|2025-8-10}} |title=Can you tell us about the buildings of the Bank's Head Office?}}</ref> <gallery> File:Bank of Japan Head Office 1984.jpg|Aerial view (1984) with original building and eastern extension (green roofs), new building (top), and southern annex (bottom left) File:Nippon Bank at Tokyo (NYPL Hades-2360397-4044196).jpg|The main building in 1922 File:Bank of Japan 20190223.jpg|The same building, photographed in 2019 File:Bank of Japan headquarters extension part 2010.jpg|Nagano's 1930s extension File:Bank of Japan Head Office,Chuo-city,Tokyo,Japan.jpg|The 1970s extension behind the original building File:Japan Currency Museum.jpg|Southern annex </gallery>

===Branches===

Tatsuno also designed the Bank of Japan's branch on Nakanoshima Island in Osaka, completed in 1903 and still in use following remodeling and extension in 1982,<ref>{{cite web |website=Art Tourism |date={{date|2024-1-11}} |url=https://www.art-tourism.jp/en/article/bankofjapanosakabranch_en |title=Bank of Japan Osaka Branch}}</ref> as well as the branch buildings in Kyoto (1906) and Otaru (1912), both now museums, and those no longer standing in Moji-ku, Kitakyūshū (1898), Hiroshima (1905), Nagoya (1906), Kanazawa (1909), Hakodate (1911), Fukushima (1913). In the 1920s and 1930s, Nagano designed more branch buildings in neoclassical style in Okayama (1922), Kobe (1927), Matsuyama (1932), Hiroshima (replacing Tatsuno's, 1936), and Matsue (1938).<ref name=BOJvideo/>

<gallery> File:Bank of Japan, Osaka Branch, West view 20190415 1.jpg|Branch building in Osaka File:Kyoto bunka hakubutsukan01 1024.jpg|Former branch building in Kyoto, since 1968 a museum and since the 1980s part of the Museum of Kyoto File:130823 Bank of Japan Otaru Museum02s4.jpg|Former branch building in Otaru, Hokkaido, since 2003 the {{ill|Bank of Japan Otaru Financial Museum|ja|日本銀行旧小樽支店金融資料館}} File:Renaiss Hall 2008.3.JPG|Former branch building in Okayama, since 2005 the {{ill|Renaiss Hall|ja|ルネスホール}} cultural center File:Former Bank of Japan Hiroshima Branch - Mar 10, 2014.jpg|{{ill|Former Bank of Japan Hiroshima Branch{{!}}Former branch building|ja|旧日本銀行広島支店}} in Hiroshima, transferred to municipal property in 2000 File:Former Bank of Japan Matsue Branch ac.jpg|Former branch building in Matsue, since 2000 the {{ill|Karakoro Art Workshop|ja|カラコロ工房}} </gallery>

==Leadership== {{Infobox Political post | post = Governor of the Bank | body = Japan | insignia = | insigniasize = | insigniacaption = Official Emblem of the Governor of the Bank of Japan | image = Kazuo Ueda 20230410meeting01.jpg | imagesize = | incumbent = Kazuo Ueda | incumbentsince = 9 April 2023 | residence = | style = His Excellency | appointer = The Prime Minister | termlength = Five years | formation = 6 October 1882 | inaugural = Yoshihara Shigetoshi | website = }}

The {{Nihongo|'''governor of the Bank of Japan'''|総裁|sōsai}} has considerable influence on the economic policy of the Japanese government.

===List of governors=== {| class="wikitable sortable" |- ! # !! Governor !! Took office !! Left office !Previous jobs !Alma mater |- | 1 || Yoshihara Shigetoshi || 6 October 1882 || 19 December 1887 |bureaucrat, diplomat |Yale University |- | 2 || Tomita Tetsunosuke || 21 February 1888 || 3 September 1889 |bureaucrat, diplomat |Whitney Business College, Newark |- | 3 || Kawada Koichiro || 3 September 1889 || 7 November 1896 |Senior member of Mitsubishi | |- | 4 || Iwasaki Yanosuke || 11 November 1896 || 20 October 1898 |Head of Mitsubishi |Edward Hall's Family School for Boys |- | 5 || Tatsuo Yamamoto || 20 October 1898 || 19 October 1903 |central banker |Mitsubishi School of Commerce |- | 6 || Shigeyoshi Matsuo || 20 October 1903 || 1 June 1911 |bureaucrat | |- | 7 || Korekiyo Takahashi || 1 June 1911 || 20 February 1913 |bureaucrat |Meiji Gakuin |- | 8 || Yatarō Mishima || 28 February 1913 || 7 March 1919<ref>Masaoka, Naoichi. (1914). [https://books.google.com/books?id=GBwNAAAAYAAJ&dq=bank+of+Japan&pg=PA127 ''Japan to America,'' p. 127.] {{Webarchive|url=https://web.archive.org/web/20160427203603/https://books.google.com/books?id=GBwNAAAAYAAJ&pg=PA127&dq=bank+of+Japan&client=firefox-a |date=27 April 2016 }}</ref> |banker |University of Massachusetts Amherst |- | 9 || Junnosuke Inoue (First)|| 13 March 1919 || 2 September 1923 |central banker |University of Tokyo |- | 10 || Otohiko Ichiki || 5 September 1923 || 10 May 1927 |bureaucrat (Ministry of Finance) |University of Tokyo |- | 11 || Junnosuke Inoue (Second) || 10 May 1927 || 12 June 1928 | | |- | 12 || Hisaakira Hijikata || 12 June 1928 || 4 June 1935 |central banker |University of Tokyo |- | 13 || Eigo Fukai || 4 June 1935 || 9 February 1937 |businessman central banker |Doshisha |- | 14 || Seihin Ikeda || 9 February 1937 || 27 July 1937 |Head of Mitsui |Keio Gijuku Harvard University |- | 15 || Toyotaro Yuki || 27 July 1937 || 18 March 1944 |central banker |University of Tokyo |- | 16 || Keizo Shibusawa || 18 March 1944 || 9 October 1945 |banker |University of Tokyo |- | 17 || Eikichi Araki (First) || 9 October 1945 || 1 June 1946 |central banker |University of Tokyo |- | 18 || Hisato Ichimada || 1 June 1946 || 10 December 1954 |bureaucrat (Ministry of Finance) |University of Tokyo |- | 19 || Eikichi Araki (Second)|| 11 December 1954 || 30 November 1956 | | |- | 20 || Masamichi Yamagiwa || 30 November 1956 || 17 December 1964 |bureaucrat (Ministry of Finance) |University of Tokyo |- | 21 || Makoto Usami || 17 December 1964 || 16 December 1969 |banker (Mitsubishi bank) |Keio University |- | 22 || Tadashi Sasaki || 17 December 1969 || 16 December 1974 |central banker |University of Tokyo |- | 23 || Teiichiro Morinaga || 17 December 1974 || 16 December 1979 |bureaucrat (Ministry of Finance) |University of Tokyo |- | 24 || Haruo Maekawa || 17 December 1979 || 16 December 1984 |central banker |University of Tokyo |- | 25 || Satoshi Sumita || 17 December 1984 || 16 December 1989 |bureaucrat (Ministry of Finance) |University of Tokyo |- | 26 || Yasushi Mieno || 17 December 1989 || 16 December 1994 |central banker |University of Tokyo |- | 27 || Yasuo Matsushita || 17 December 1994 || 20 March 1998 |bureaucrat (Ministry of Finance) |University of Tokyo |- | 28 || Masaru Hayami || 20 March 1998 || 19 March 2003 |central banker |Hitotsubashi University |- | 29 || Toshihiko Fukui || 20 March 2003 || 19 March 2008 |central banker |University of Tokyo |- | 30 || Masaaki Shirakawa || 9 April 2008 || 19 March 2013 |central banker |University of Tokyo (B.A.) University of Chicago (M.A.) |- | 31 || Haruhiko Kuroda || 20 March 2013 || 9 April 2023 |bureaucrat (Ministry of Finance) President of ADB |University of Tokyo (B.A.) University of Oxford (MPhil) |- | 32 || Kazuo Ueda || 9 April 2023 || Incumbent |Economist at the University of Tokyo |University of Tokyo (B.S., B.A.) Massachusetts Institute of Technology (PhD) |}

===Monetary Policy Board=== As of 20 December 2025, the board responsible for setting monetary policy consisted of the following 9 members:<ref>{{cite web|title=Policy Board : 日本銀行 Bank of Japan|url=https://www.boj.or.jp/en/about/organization/policyboard/index.htm|website=www.boj.or.jp|access-date=20 December 2025|language=en|archive-date=1 October 2025|archive-url=https://web.archive.org/web/20251001175346/https://www.boj.or.jp/en/about/organization/policyboard/index.htm|url-status=live}}</ref> #Kazuo Ueda, Governor of the BOJ #Uchida Shinichi, Deputy Governor of the BOJ #Himino Ryozo, Deputy Governor of the BOJ #Noguchi Asahi #Nakagawa Junko #Takata Hajime #Tamura Naoki #Koeda Junko #Masu Kazuyuki

==See also== {{Portal|Banks}} *Japanese yen *Economy of Japan *National Printing Bureau *Japan Mint *List of central banks

==Notes and references== ===Notes=== {{Notelist}}

===Citations=== {{Reflist}}

==Further reading==

{{refbegin}} * Bank of Japan. ''Functions and operations of the Bank of Japan'' (Institute for Monetary and Economic Studies, 2nd ed. 2012), [https://www.boj.or.jp/en/about/outline/data/foboj01.pdf online] {{Webarchive|url=https://web.archive.org/web/20200224070448/https://www.boj.or.jp/en/about/outline/data/foboj01.pdf |date=24 February 2020 }} * Cargill, Thomas F., Michael M. Hutchison and Takatoshi Itō. (1997). ''The political economy of Japanese monetary policy.'' Cambridge: MIT Press. {{ISBN|9780262032476}}; [https://www.worldcat.org/oclc/502984085 OCLC 502984085] {{Webarchive|url=https://web.archive.org/web/20130528144220/http://www.worldcat.org/title/political-economy-of-japanese-monetary-policy/oclc/502984085?referer=br&ht=edition |date=28 May 2013 }} * Hamaoka, Itsuo. ''A study on the Central Bank of Japan'' (1902) [https://archive.org/details/studyoncentralba00hamauoft online] * Longford, Joseph Henry. (1912). [https://books.google.com/books?id=rpRFAAAAIAAJ ''Japan of the Japanese.''] {{Webarchive|url=https://web.archive.org/web/20150330133759/http://books.google.com/books?id=rpRFAAAAIAAJ&client=firefox-a |date=30 March 2015 }} New York: C. Scribner's sons. {{OCLC|2971290}} * Masaoka, Naoichi. (1914). [https://books.google.com/books?id=GBwNAAAAYAAJ ''Japan to America: A Symposium of Papers by Political Leaders and Representative Citizens of Japan on Conditions in Japan and on the Relations Between Japan and the United States.''] {{Webarchive|url=https://web.archive.org/web/20150330134021/http://books.google.com/books?id=GBwNAAAAYAAJ&client=firefox-a |date=30 March 2015 }} New York: G.P. Putnam's Sons (Japan Society). {{OCLC|256220}} * Nussbaum, Louis Frédéric and Käthe Roth. (2005). ''Japan Encyclopedia.'' Cambridge: Harvard University Press. {{ISBN|978-0-674-01753-5}}; [http://www.worldcat.org/oclc/48943301/editions?editionsView=true&referer=br OCLC 48943301] {{Webarchive|url=https://archive.today/20121204163738/http://www.worldcat.org/oclc/48943301/editions?editionsView=true&referer=br |date=4 December 2012 }} * {{cite journal |doi=10.1017/S096856501000020X |title=Research on financial and monetary history based on the records of the Bank of Japan Archives: A note |date=2010 |last1=Ohnuki |first1=Mari |last2=Murakami |first2=Daisuke |last3=Takashima |first3=Masanori |journal=Financial History Review |volume=17 |issue=2 |pages=273–280 }} * Sarasas Phra. ''Money and Banking in Japan'' (1940) [https://archive.org/details/in.ernet.dli.2015.239841 online] * Shizume, Masato. "A History of the Bank of Japan, 1882–2016." (Waseda University, 2016) [https://www.waseda.jp/fpse/winpec/assets/uploads/2014/05/No.E1719.pdf online] {{Webarchive|url=https://web.archive.org/web/20200529052639/https://www.waseda.jp/fpse/winpec/assets/uploads/2014/05/No.E1719.pdf |date=29 May 2020 }} * Vande Walle, Willy ''et al.'' [http://www.researchportal.be/en/project/institutions-and-ideologies-the-modernization-of-monetary-legaland-law-enforcement-regimes-in-japan-in-the-early-meiji-period-1868-1889--(KUL_3H030060)/ "Institutions and ideologies: the modernization of monetary, legal and law enforcement 'regimes' in Japan in the early Meiji-period (1868-1889)"] {{Webarchive|url=https://web.archive.org/web/20110824040715/http://www.researchportal.be/en/project/institutions-and-ideologies-the-modernization-of-monetary-legaland-law-enforcement-regimes-in-japan-in-the-early-meiji-period-1868-1889--(KUL_3H030060)/ |date=24 August 2011 }} (abstract). FRIS/Katholieke Universiteit Leuven, 2007. * _____________. (2003). ''Princes of the Yen: Japan's Central Bankers and the Transformation of the Economy.'' Armonk, New York: M.E. Sharpe. {{ISBN|978-0-7656-1048-5}}; [https://www.worldcat.org/oclc/471605161 OCLC 471605161] {{Webarchive|url=https://web.archive.org/web/20130528151917/http://www.worldcat.org/title/princes-of-the-yen-japans-central-bankers-and-the-transformation-of-the-economy/oclc/471605161%26referer%3Dbrief_results |date=28 May 2013 }} {{refend}}

==External links== {{Wikisource|Bank of Japan Act}} {{Commons category|Bank of Japan}} * {{Official website|https://www.boj.or.jp/en/}} {{in lang|en}} * [https://web.archive.org/web/20071102231011/http://www.money.org/AM/Template.cfm?Section=Search&template=%2FCM%2FHTMLDisplay.cfm&ContentID=2411 Building a national currency (1868-99)] * [https://web.archive.org/web/20090916004153/http://www.forexmotion.com/index.php/en/exchange-rates.html Japan and World Interest Rates], Interest Rates data and chart daily updated by ForexMotion

{{DEFAULTSORT:Bank Of Japan}} Category:Bank of Japan Category:Chūō, Tokyo Japan Category:Banks of Japan Category:Economy of Japan Category:Banks established in 1882 Category:Japanese companies established in 1882 Category:Buildings of the Meiji era Category:Nihonbashi Category:Currencies of Japan